Tuesday, 15 August 2017

Renewing the National Partnership on Remote Housing: seasons such as these

King Lear Act 3, Scene 4

A number of recent developments make it timely to provide further commentary on the hugely important policy issues around remote Indigenous housing which will be determined by the Government over the coming few months. Previous blog posts (link here and link here) are relevant and provide crucial contextual background to the issues confronting the Government in the remote housing policy space.

In mid-2016, the Government revised and rebadged the National Partnership on Remote Indigenous Housing as a new National Partnership on Remote Housing (sometimes referred to as the new Remote Housing Strategy). (There is a link to the NPA and associated schedules here). According to the PMC website (link here):

The Government is working to refocus housing delivery in remote Indigenous housing. The new National Partnership on Remote Housing (NPRH) ensures local indigenous people have the opportunity to contribute to their housing through employment, Indigenous business engagement and better links with the Community Development Programme (CDP). The NPRH will also continue to address overcrowding by funding $774.131 million to the construction of new houses and refurbishments in larger, sustainable remote Indigenous communities.

While the Government has indicated that there will be $774m spent over these two years, this funding is essentially the funds which were originally allocated in the original NPARIH established in 2008. See the PMC website for the new targets for the period 2016-18. The webpage outlines national targets for three categories of expenditure: new builds, refurbishments and employment and education housing (EEH), and provides a breakdown by jurisdiction against each category. The national targets are 785 new builds, 207 refurbishments and 58 EEH units respectively.

The revised National Partnership Agreement provided for a review of the NPRH and its predecessor NPARIH to be undertaken. The Minister announced the review into remote housing in November 2016 (link here). During the most recent Senate Estimates hearings, and in answer to a Question on Notice (QoN) (number 186), the Minister indicated that the review had been provided to the Government in May 2017, but that a decision on release had not been taken and was a matter for the Government. The Minister also indicated in answer to QoN 104 that ‘future arrangements for the expiring National Partnership Agreement will be considered in the Mid-Year Economic and Fiscal Outlook in the year preceding expiry of funding’ That is, in the late 2017/early 2018 MYEFO.

The Indigenous Advisory Council met on 10-11 May 2017, and in their communique dated 19 May (link here) made a number of comments on Indigenous housing and the recent (as yet unreleased) review of remote housing.  On housing, they noted:

Council acknowledged the findings of the Remote Housing Review and expressed concern that despite significant reductions in overcrowding investment is required to meet unmet need and maintenance of housing stock. Council emphasised adequate housing is critical to ensure positive outcomes are maintained in health, education, employment and community safety. While acknowledging the challenges highlighted through the Review Council indicated there are opportunities to develop innovative housing solutions. It was recommended Government explore options for local governance and community management of housing, international best practice and ongoing investment and flexible shared funding arrangements between the Commonwealth and states and territories to allow solutions at a local level.

The most recent developments were comments made by the Minister in an ABC Q&A program at Garma (link here), where in response to a question about overcrowding and the impact on peoples’ lives, he foreshadowed a number of likely policy directions:

We’re deadly serious about this. We’ve invested $5.4 billion over the last decade, and I think everybody would agree we could have done a lot better. We have reduced overcrowding from 52% to 37% – it’s still in the margins, and that took a fair while to do. So, the next rollout, which we are now negotiating with the states and territories about the National Partnership on Remote Indigenous Housing, we’ll be negotiating on the basis of what the communities have asked us to negotiate on.

So, Indigenous employment is non-negotiable. Indigenous procurement is non-negotiable. And we’ll be asking the states to match those funds. Because we need a pulse. Sometimes we can just trickle along and we’ll be just catching up, just getting ahead, but we actually need a significant injection of funds. So, that’ll be the basis of our negotiation with the states. But those houses cannot be built by whitefellas getting off planes with nail bags. Those times have to go.

Local Indigenous people maintaining their own houses, local Indigenous people building their own houses and actually managing the tenancy of their own houses is the only way this is gonna work, and I assure you, those are the changes I intend to make.

So, in terms of the policy architecture for remote Indigenous housing, where does all that leave us?

First to the positives:

The commitment of $5.4bn for remote social housing over the ten years to 2018 has delivered a step change in the quantum and quality of housing in remote communities. In round figures, NPARIH/NPRH will have delivered around 4000 new houses and at least 10,000 refurbished houses over the decade, off a low and worsening base. That is a good thing.

The National Partnership also drove policy reform on a range of fronts: Indigenous employment, clearer tenure arrangements to lock in landlord responsibilities, and a stronger focus on managing the existing and new asset base through sustained Property and Tenancy Management (PTM).

The level of overcrowding will have reduced considerably over the ten years, using the Minister’s figures, from 52 to 37 percent, a reduction of 15 percent.

The Minister appears committed to continuing some level of funding by the Commonwealth for remote housing, and is keen to strengthen further Indigenous employment, Indigenous procurement, and local involvement.

Notwithstanding these achievements, substantial policy challenges remain, and it is far from clear that the Government is prepared to address them. Listed below are six issues of most serious concern.

First, notwithstanding the progress on overcrowding, a situation where 37 percent of Indigenous citizens resident in remote Australia live in overcrowded condition is on any objective assessment a national crisis. It feeds disadvantage, and demands an open and transparent public debate. It would be useful if the general public were advised what the cost of reducing these levels of overcrowding to levels comparable to the Australian norm would be. This would help to build support for the necessary funding.

Second, a key contributor to the low level of public discussion around these issues is the lack of transparency in relation to key metrics about the situation in remote communities and the key metrics about the program. While there are myriad ‘data points’ available to a diligent researcher, compiling them into a coherent whole which is both accurate and understandable to the wider community (including the Indigenous community) is almost impossible, and constitutes a serious impediment to community discussion and understanding. There is in my view an onus on government to lay out in a clear and succinct way the current state of play in relation to this issue, particularly a government which argues that there is a need for more evaluation of government programs.

The Department obtains six monthly reports from each of the funded jurisdictions, and the agreements specify that the Commonwealth may release data and information in relation to the operation of the program, yet it doesn’t happen in any coherent form.

The level of information available on the Department’s website in relation to what is one of the three major government programs for Indigenous Australians is extremely poor, reinforced by the rebadging of the program in 2016. The decision to withhold the recent review, without offering any reason, merely serves to reinforce the Government’s tactic of micro-managing and constraining public discussion and debate on this issue rather than encouraging greater understanding in the wider community.

Third, if the Government is interested in pursuing the PM’s Advisory Council recommendation for improved local governance and community management of housing, a good place to start would be in the provision of a much more robust program management data set in a format which is automatically updated and publically accessible. In addition, careful design of local arrangements based on both upward and downward accountability, a focus on capability and continuous improvement, and default arrangements for when local structures break down or are subject to a crisis will be required. In other words, there is considerable devil in the detail in the Advisory Council’s advice which requires upfront attention fi the Government intends to take it seriously.

Fourth, my major concern relates to the Minister’s call for matching funding from the states and the NT. In particular, I am concerned that the Government may be using this argument as a ploy to reduce investment levels in the remote housing sector. While I have no in principle objection to jurisdictions being required to invest in the remote housing sector, there are a series of practical constraints which will constrain their capacity to commit.

The new NT Labor Government went to the last election committing to spend $1bn over ten years, but I am sceptical that it will manage to meet this commitment. The NT carries a huge debt burden in Commonwealth borrowings (which went to building their social housing system in the 1960s and 1970s) and has a large number of ‘locked in’ financial commitments relating to metropolitan based infrastructure developments.

In addition, in Indigenous policy contexts, it has major financial pressures in relation to expanding serviced lots in most remote communities; many remote communities have met the limits of their essential service infrastructure (thus limiting new housing investment until it is expanded); and the National Partnership Agreement does not cover smaller communities and outstations nor essential services in remote communities (which the Commonwealth has offloaded to the states in recent years).

These are all pressures the Commonwealth does not co-invest in, so why should the states and the NT be required to suddenly co-invest in the remote housing program when the Commonwealth refuses to meet them half way on other key remote community investment needs.

The stark reality hidden by debates about financial burden sharing with the states is that remote communities continue to face a deep-seated and structurally serious crisis in terms of housing quantum and conditions. Any solution will require both robust and innovative policy design and significant ongoing investment. In this context, the fiscal capacity of the Commonwealth far exceeds that of the states and the NT. By all means incentivise the states to do more, but the bottom line ought to be that the Commonwealth does not reduce its overall funding commitment of around $550m per annum. Indeed, in a world where comparative need rather than political powerlessness determined funding allocations, the case for taking the opportunity of this second ten year National Partnership Agreement to increase funding levels over what was allocated in 2008 would be irrefutable.

My fifth concern follows on from, and in a sense mirrors the fourth. The Minister’s rhetoric on Indigenous employment and local involvement in housing management contracts plays to deep seated Indigenous community concerns about ‘owning’ what happens in their communities: ‘But those houses cannot be built by whitefellas getting off planes with nail bags. Those times have to go’. I wholeheartedly agree that maximising Indigenous employment is an important policy objective, but it must not be pursued to the point where it places housing outcomes at risk.

Yet what the Minister’s stated approach implicitly requires is the rejection of the reality that fixing the structural and systemic issues in remote housing in a timely and cost effective way across scores of major communities requires major system wide investments managed as a very small number of major infrastructure projects rather than a disaggregated program funding hundreds of micro projects. To be blunt, the capability for major project implementation does not exist in remote communities. It probably doesn’t even exist in the Minister’s Department. 

Major projects involving complex legal, engineering, survey, hydrological, commercial and technical issues require specialist capabilities. This is not about some ‘whitefella with a nailbag’. The risk Indigenous remote residents face is that the Minister will regress the program into a pre-NPARIH form, where available funds are split into hundreds of project splinters, involving a myriad of players, contractors, architects, builders and the like, all of variable quality, and where effective regulatory oversight is virtually impossible. In this scenario, effective outcomes would be fundamentally compromised.

Of course, in a hypothetical world where a Government decided to strip substantial levels of funding out of the remote housing program, one way to manage the politics of that would be to develop and give prominence to the rhetoric of Indigenous employment and business engagement, and actively reshape the program as a myriad of locally managed micro projects with only lose regulatory oversight.  

My sixth and final concern relates to maintaining investment in both the current and additional asset base. Property and tenancy management is an essential component of the remote housing system. It was an essential element in the reform design of the original NPARIH. Without effective PTM, the remote housing system will run down, asset life spans will shorten, and the cost of necessary repairs will rise exponentially. What has become clear in recent years is that the quality of tenancy management by the states and the NT continues to fall far short of what is required to protect the asset base, and what is required by the relevant tenancy legislation in the various jurisdictions. A major shortcoming of NPARIH and potentially of the current NPRH is that there was no effective line of sight by the Commonwealth to implementation of PTM by the states and the NT. This needs to be fixed urgently.

There are encouraging signs that the 2016 NPRH Agreement recognises this in principle, but in practice, the Minister’s 2013 decision (described in more detail here) to cut $95m from PTM under NPARIH continues to reverberate. The Minister should ensure in any refinancing of the remote housing program that in addition to continuing the current levels of Commonwealth funding under the National Partnership, that the PTM funds of $95m he cut are reinstated.

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